The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.

Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."

That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.

Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.

[smartcode_project:default project_id=144913 project_image_fid=297740]

Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.

The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.

[smartcode_project:default project_id=144913 project_image_fid=297741]

The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.

Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.

[smartcode_project:default project_id=144913 project_image_fid=297735]

Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.

Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.

[smartcode_project_cta:default project_id=144913]

Joel Robinson

Garden-led design drives buyer demand at Yarraville Green

National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 41-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

[smartcode_project:default project_id=6515 project_image_fid=68833]

Developer Bensons Property Group is behind the 41-storey tower, which has 229 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

[smartcode_project:default project_id=6515 project_image_fid=360215]

One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

[smartcode_project:default project_id=6515 project_image_fid=68839]

There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

[smartcode_project:default project_id=150017 project_image_fid=374052]

The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

[smartcode_project:default project_id=150017 project_image_fid=372547]

The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

[smartcode_project:default project_id=150017 project_image_fid=374054]

Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

[smartcode_project:default project_id=150017 project_image_fid=370962]

While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

[smartcode_project:default project_id=146527 project_image_fid=366550]

That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

[smartcode_project_cta:default project_id=150017]

Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Elevated amenity anchors daily life at Aeris, Melrose Park

Housing Affordability

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There was just the one reported sale at $500,000 or less at Sydney on the long weekend.
It was a $500,000 sale in Strathfield South.
The 11/1-3 Therry Street offering (below) was sold pre-auction through Richard Baini at Richard Matthews Real Estate.
<img src="https://i3.au.reastatic.net/800x600/a10ff8779a9175f208c880ff10c7d967548d421c8028b8afd6f044c17f420438/main.jpg" alt="11/1-3 Therry Street, Strathfield South" title="11/1-3 Therry Street, Strathfield South" data-index="0">
It was a 69 sq m two bedroom apartment in a 1966 block of 11.
It last sold at $243,000 in 2007, so doubled in price over the eight year period.
The most affordable property reported sold at the weekend on the outskirts of Sydney was a two-bedroom 72 sqm, 1980 built, strata home at 4/40-42 Ocean View Road, Gorokan, sold for $300,000 by Raine and Horne Charmhaven.
It didn't double in the past 13 years pricewise, having last traded at $160,000 in 2002.
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jchancellor-FAypfDUnLy

Sydney's cheapest at $500,000 in Strathfield South amid long weekend auction offerings

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There were just the 44 Victorian auctions reported to the REIV on the AFL grand final weekend, with 28 selling. 
Sales ranged between $300,000 at Sunbury to $1.96 million at Mount Waverley.
The cheapest at Sunbury, was a two bedroom house (below) last sold at $274,500 in April 2013.
Its sale price reflected 3.6% annual price growth over the two plus years. The REIV had regional Victoria annual growth at 6.3% almost double over the year to June.
The Barry Plant agency was giving $285,000 to $315,000 price guidance. 
The house had been up for rent at $290 a week recently, reflecting a 5% gross rental yield, slightly down on the $300 weekly asking rent in 2013.
 
<img src="https://i3.au.reastatic.net/800x600/c4b4d58137c24a88d2058138e89a09d6b02556b1a531d61a7ccd2969e3dd90f3/main.jpg" alt="303 Gap Road, Sunbury" title="303 Gap Road, Sunbury" data-index="0"> 
The Mount Waverley top weekend seller was a new house offering, with the nearby three-bedroom home at 52 Lechte Road, Mount Waverley sold for $1,600,000 by Fletchers as second highest price.
Despite the local sporting attraction, it was a weekend when the Chinese were out happy to snap up property. Like all things golden, the Golden Week holiday in China – in the first week of October – is considered a lucky time to buy a property.
This wasn't to deny September didn't see strong sale with a host of top prices paid across Mount Waverley.
A four-bedroom house on 4097-square-metre at 35-37 Regent Street sold at an undisclosed $6 million plus price record for the City of Monash.
The property had passed in at $5.55 million and sold to a developer soon after the auction.
A new townhouse price record for Monash was registered when a newly-built four-bedroom townhouse at 5A Billing Street sold privately for $2.45 million. <a href="https://www.realestateview.com.au/Real-Estate/5b-billing-street-mount-waverley/Property-Details-buy-residential-9428938" target="_blank">The mirror image next door 5B </a>has been scheduled for October 17 Jellis Craig auction.
The second most affordable property reported sold at the weekend was a four-bedroom home at 74 Ballan Road, Werribee sold for $325,000 by LJ Hooker Werribee.
The REIV advised top three auction sales suburbs in the month of September were Reservoir (55 sales), South Yarra (46 sales) and Richmond (42 sales).
TOP 5 HOUSES
 1. 6 Pinewood Drive, Mount Waverley $1,960,000 2. 52 Lechte Road, Mount Waverley $1,600,000 3. 200 Manningham Road, Bulleen $1,280,000 4. 33 Bowen Road, Doncaster East $1,035,000 5. 2 Calrossie Road, Blackburn South $960,000
 TOP 5 BARGAIN HOUSES
 1. 303 Gap Road, Sunbury $300,000 2. 74 Ballan Road, Werribee $325,000 3. 19 Betula Street, Doveton $410,000 4. 8 Simpson Drive, Dandenong North $505,000 5. 13 Brolga Avenue, Chelsea Heights $533,000 TOP 5 APARTMENTS
 1. 2/20 Kerry Parade, Mont Albert North $910,000 2. 3/3 Myrtle Road, Canterbury $837,000 3. 17/135 Brighton Road, Elwood $796,000 4. 215/9 The Arcade, Docklands $590,000 5. 803/8 Marmion Place, Docklands $482,000
Source <a href="/news">REIV</a>
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Slow growth Sunbury, Victoria's cheapest weekend sale

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GUEST OBSERVER
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House price growth eased in September, led by the key Sydney market, which posted its weakest monthly result in two and a half years. Overall, the data are consistent with our view that the housing market is beginning to soften. 
House prices were unchanged in Sydney in September in seasonally adjusted terms, ending a run of 1-2% monthly growth over the past year. This result is in line with the sharp fall in auction clearance rates in Sydney (Figure 1) as demand has eased somewhat and housing supply risen sharply.
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<div class="column">This easing demand is supported by yesterday’s private credit data, which showed a further slowing in growth in investor housing credit. This suggests that APRA’s macro prudential measures (which have seen tighter borrowing conditions and higher interest rates for investors) are having the desired effect of containing investor borrowing and taking some heat out of the market.</div>
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 Meanwhile, Melbourne house prices posted strong growth in September, up 1.2% m/m (seasonally adjusted). It appears that lower auction clearance rates have been slower to impact on house price growth in Melbourne compared with Sydney. But as this trend continues to unfold, we expect to see price growth in Melbourne ease over coming months. 
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Justin Fabo is senior economist, ANZ Research and Daniel Gradwell is economist, ANZ Research. Both can be contacted <a href="https://www.anz.com/corporate/research/" target="_blank">here.</a>
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Sydney house price growth eases: ANZ Research

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The RBA boss Glenn Stevens was again pressed today on housing affordability, especially for younger people, by some school children.
The issue has been asked at Mr Stevens at past House of Representative's economics committee meetings too.
He also noted it "turns out there was a lot more invested in [property] lending than we all knew in the past."
But he told the House of Representative's economics committee it had been good as economic growth was now slowing.
He also noted unemployment was more important than the ratio of investors/owner occupiers when it comes to housing stability.
He told the hearing the board may not be contemplating any further rate cut saying: "We're pretty content where we are now."
He was also asked about the volatility in the Chinese economy, noting there had been a "fabled hard landing that people have been talking about for years."
When asked on home buyer grants, he noted the solution to high property prices was more supply - not money that ends up with sellers.
Overall inflation was contained and it would take a very sharp fall in the dollar to push inflation up, he suggested.
Last month National Bank of Australia increased the value of mortgages on its investor loan book by nearly $30 billion, after reclassifying data it holds for reporting with the Australian Prudential Regulation Authority.
NAB reclassified previously reported data, which boosted the value of NAB's housing investor loans to $93 billion from the $66.6 billion previous notification.
Before the revision, NAB's investor loan mortgage book was around the same size of ANZ's investor loan book, at around $60 billion.
The big four institutions hold a combined $430bn worth of investor loans on their books. CBA holds $128 billion, while Westpac has the largest amount of investor loans, worth around $150 billion, according to APRA's latest figures.
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More invested in lending than we all knew: RBA's Glenn Stevens

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Hervey Bay has gradually absorbed any excess apartment overstock over the last five to six years after a sustained period of oversupply and wavering sales prices, according to Herron Todd White.
Herron Todd White's September Month in Review found currently there is reasonable demand for units close to the CBD and beach, with the sales price difference between new and old apartments minimal.
"Onground 1990 two bedroom, one bathroom units may sell for only $20,000 less than a circa 2007 modern two bedroom, two bathroom townhouse in a similar location," the report noted.
"It appears that the demand for onground units appeals to a wider market and is likely to appeal to an older buyer (with many retired residents on the Fraser Coast).
"Most of the older unit stock in original condition predominantly sells from $190,000 up to $230,000. Newer units may typically sell for between $250,000 and $330,000, with higher priced stock above this range selling for $380,000. Buyers in the unit market comprise a mix of investors and owner occupiers, with most units selling within six months of the original listing."
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mick.cee-iDmgDDAmu8

Affordability key to Hervey Bay unit market: Herron Todd White

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Construction in Darwin suburbs remains unabated with incentives to first home buyers and the Real Housing for Growth investment program driving investment, according to Herron Todd White's September Month in Review.
Herron Todd White noted the high construction level of new units the CBD and suburbs Palmerston, Nightcliff, Millner, Coconut Grove and Berrimah have a mix of medium density, large complexes with ground level and two storey semi detached dwellings.
"The big shift in the unit market has been seen in the rental market. For the year to June 2015 in the inner Darwin sector,one bedroom units have reduced 9.5%, two bedroom units have reduced 12.5% and three bedroom units have reduced 16.5%," the report highlighted.
"This has certainly been a welcome relief to all tenants in the market, swinging the pendulum back to the tenant after a number of years in the landlord’s corner."
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Incentives driving Darwin property investment: Herron Todd White

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Policies seeking to increase home buyers’ purchasing power when supply is insufficient will serve only to drive up prices and reduce housing affordability, according to the Australian Bankers Association Inc (ABA).
"The buying power of most home purchasers is determined ultimately by the amount of money they can borrow. 
"The average loan size is now $357,500 or 8.7%higher over the past year, and not surprisingly the highest on record."
Finance providers are maintaining high lending standards, claimed ABA in the submission to the House of Representatives Standing Committee on Economics.
"The proportion of new loan approvals to high LVR borrowers, i.e. LVRs more than 90% has fallen since 2009 for all borrowers and remains below 10% for investor loans.
"Low doc loans have fallen to very low levels for both owner-occupiers and investors. The proportion of interest only loans has been gradually rising since 2009, with investors showing a greater propensity to use this form of financing compared with owner-occupiers. The share of housing loans which are impaired has been falling since 2011." 
Australia needs to progressively increase its housing stock to shelter its growing population. 
"Over the year ending September 2014 Australia’s population is estimated to have increased by 354,600.Of this, 150,700 was natural increase and 203,900 was net overseas migration. 
"There is a danger that policy prescriptions that seek to address issues in particular markets – such as excess demand in Sydney and Melbourne – but which are applied across the nation may have unintended consequences in other areas of Australia where such issues are less pressing or absent." 
ABA believes that there is significant opportunity for reform in policies to increase land release for housing construction. 
"The supply side of the housing industry is now beginning to lift. Approvals to build new dwellings have been trending up since mid-2012 and over the year to April 2015, 214,000 approvals were issued for the construction of dwellings. 
Building approvals 
"The close relationship between interest rates and housing construction approvals does not mean that interest rates can be used as a policy tool to address issues of housing shortages. 
"Interest rates influence the short term cycles in construction, but do nothing to address the longer term structural imbalance between demand and supply."
In terms of structural issues a persistent complaint is that development is hindered by a shortage of green field sites, reflecting insufficient land release by state governments, and by excessively restrictive council regulations and developer levies. 
"Demographia supports the assertion that higher land prices are a major factor and that a key reason for expensive land is inadequate release of new land for development." 
Around two thirds of households own or are purchasing their home and about one third are renting. Australia’s home ownership rate is around the middle of many of its peers in the Organisation for Economic Co-operation and Development (OECD). 
"More recent data on housing finance commitments suggests that investors are increasing their share of the housing stock. This is not a uniform trend across Australia but is particularly marked in Sydney and to a lesser extent in Melbourne."
Banks are the predominant suppliers of finance for housing in Australia and housing loans comprise the major part of most banks’ assets. 
"Loans outstanding for the purchase and construction of houses total $1.46 trillion. Of this, banks lend $1.35 trillion, with the remainder spread among building societies, credit unions and finance companies. 
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"Housing loans comprise 62 per cent of the total lending assets of banks and about two- thirds are loans to owner-occupiers and the remaining third to investors. 
"Over the past two years or so the growth rate [of borrowing for housing] has gradually accelerated and has now reached 7.2 per cent over the year ending April 2015. 
"The growth rate over recent months has been the highest since late 2010, but it is well below the average rate of growth in the pre GFC era. The last historical high point was in March 2004 at almost 22 per cent."
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Interest rates on home loans are at multi-generational lows. The average advertised standard variable mortgage rate was 5.45 per cent in May 2015, the lowest since 1968. 
"Today’s discounted rate is even lower at less than 5 per cent. These low rates compare to the 17 per cent peak recorded between June 1989 and March 1990.
"These low rates charged to home borrowers are in part a reflection of the intense competitive environment faced by bank and non-bank lenders. Mostly however, they are a product of the globally low interest rate environment. The RBA’s cash rate was reduced to 2.00 per cent in May 2015 - the lowest in a generation. 
"Interest rates on fixed rate loans are also very low at below 5 per cent. The proportion of loans which are fixed rate is now falling. Around 10 per cent of new loans are fixed rate, which is about half the proportion in 2013. 
"Household finances are in good shape. Dwellings are the single largest component of household wealth at $5.1 trillion, with superannuation at $1.9 trillion. 
"The ratio of housing debt-to-housing assets is around 28 per cent, with every $1 of debt being matched by over $3 in house value."
Although households are increasing their borrowings for housing, they are also prepaying their loans to a greater degree. As a result of this, households are now on average the equivalent of 28 months, or more than two years, ahead on their mortgage repayments 
A change in the mix of property taxes away from stamp duty, and with greater emphasis on land tax would likely improve turnover in the housing market, improving the efficiency of the use of the existing stock of housing
The ABA supports the recommendation of the Committee (recommendation 9.70) that Treasury should prepare and publish a study on the influence of negative gearing on the housing market.
ABA also believes there is not enough evidence to support that current CGT arrangements combined with negative gearing encourage speculative investment as deductions are made at the taxpayers’ marginal tax rate, but gains are taxed at half of that rate. 
"Removal of stamp duty on housing transactions would simplify taxation arrangements. It would improve efficiency by increasing the level of beneficial transactions and by improving the allocation of resources. 
"Abolishing stamp duty would result in a more efficient allocation of housing, as it would no longer act as a barrier to downsizing or moving to a more suitable property. It would also cease to act as a barrier to workers seeking to move for better employment opportunities. 
"An abolition of stamp duty would be expected to result in an increase in property values, particularly in an environment of constrained supply. 
"For banks this would improve (reduce) the LVRs of existing borrowers, with a concomitant reduction in the riskiness of the existing housing book. It would lift the effective available deposits for new borrowers although the effect of this on improved housing affordability may be offset by higher purchase prices. 
"Land tax is a more efficient form of property tax than stamp duties, particularly when it is broad-based. 
"Broadening the scope of land taxes provides an opportunity to lower the rate of tax. 
The revenue implications of changing the rate of land tax vary markedly depending on its scope. 
"The only argument in favour of higher rates of land tax is to increase government revenue. Due to the low excess burden of land tax, changing the rate of land tax to increase government revenue would be one of the least distortional methods to boost receipts. 
"However, a change in rate by itself does not address the issues of complexity or fairness."
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Finance providers maintaining high lending standards: ABA

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There continues to be a yawning divide between the facts on housing affordability and media coverage claiming a crisis.
Yawning is an appropriate word, because journalistic insistence on declaring the Great Australian Dream dead in the face of all the evidence has become boring.
According the latest research on the subject, property in Australia is more affordable than it was 12 months ago – with the exception of one state (no prizes for guessing which one) .
Across Australia, affordability improved in the June Quarter from 30.9% of household income devoted to mortgage payment to 30.3%, according to a new report from the Real Estate Institute of Australia and Adelaide Bank.
The exception to a general picture of improving affordability was New South Wales, where households used 35.6% of their income to meet their mortgage repayments in the June 2015 quarter, compared to 35.3% in the June 2014 quarter.
Last month, the other major research into housing affordability – the Housing Affordability Index from the HIA – also found that affordability has been improving around Australia, with Sydney as the obvious exception.
Media generally manages to ignore that reality and run headlines like “Are foreign investors destroying the first home buyer market?” and articles like a recent one published recently by the Herald Sun which is a serious candidate for our annual Worst Article of the Year award. 
A “journalist” declared in the Herald Sun that “the Great Australian Dream of a house in the suburbs has become an unaffordable nightmare” and justified this by quoting the price of the most expensive houses in a range of suburbs – not the median price, but the dearest. 
The writer noted there was a house for sale in Doncaster asking $3.5 million and used that to support this declaration: “What hope will our kids have?” The article went downhill from there. 
That’s the reality of mainstream media in modern Australia. There are favoured story lines and publications will pursue them with little regard for the facts.
Back in the real world, the new research on affordability shows that the Northern Territory experienced the biggest gain in affordability, with the share of income needed to meet mortgage repayments falling 2.8 percentage points, from 26.6% to 24.9%. 
Western Australia improved from 26.6% to 24.4% and Tasmania from 25% to 22.9%. South Australian mortgagees had a saving of 1.6 points, from 27.1% to 25.5%, while Queensland improved from 28.1% to 27.3%, the ACT from 19.8% to 19.5% and Victoria from 32.2% to 32.1%.
Those hard statistics add to the growing pile of evidence that concerns about price booms, bubbles and out-of-control markets are overblown and wide of the mark.
It has promoted Domain Group senior economist Dr Andrew Wilson – one of the few economists in the land who has a grasp on property issues – to call on Australia’s prudential banking regulator to prove that the country's housing market really does need fixing
Wilson questioned the basis for restrictions to investor lending, saying that APRA had not provided detailed modeling to show why it believed the investor market was overheated.
“Where's the heat? I don't understand where the heat is,” he said. “We have the lowest level of mortgage defaults we've seen. Affordability is still below average levels.”
Wilson said Australian markets have a historical reputation for “orderly growth and correction phases”. He who noted that the one heated market, Sydney, was starting to cool as part of that natural process.
“This is the nature of our housing markets and we're very fortunate that we have those in-built stabilisers in our housing market. I think once we see policymakers interfere in that process, the downstream consequences are really problematic."
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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Yawning divide between the facts on housing affordability: Terry Ryder

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GUEST OBSERVER
The Westpac –Melbourne Institute Consumer Sentiment Index fell by 5.6% in September from 99.5 in August to 93.9 in September. 
This solid fall in the Index comes as no surprise. We were somewhat puzzled by the surprise increase in the Index last month of 7.8% and there was always likely to be some correction this month. Of course the deluge of disturbing news around violent gyrations in both Australian and overseas equity markets; poor economic data from China; a disappointing report on Australia’s growth rate and the weakness in the Australian dollar were also likely to have unnerved households.
This print on the Index now marks the 17th out of the last 19 months that the Index has been below 100. A level of the Index below 100 indicates that pessimists outnumber optimists. After acknowledging some volatility in the series the underlying picture is that confidence has been little changed over the last year – firmly stuck below 100 and averaging around 96.
For the September survey we also ask respondents about the news items they most recall. This provides an objective test of our assumptions around the factors driving the movements in the Index. For this survey the most recalled news items were around domestic economic conditions overseas issues. Nearly 42% of respondents recalled overseas news items – the second highest proportion on records back to 1975. The highest proportion came in December 2011 (55%) when the European financial crisis was dominating headlines. Domestic economic conditions (54%) were also important this month. Respondents were significantly more negative around domestic conditions than in June.
News on the Australian dollar was noted by 15.5% of respondents – the highest on the dollar since June 2002.
The government would be pleased to see that ‘Budget and taxation’ caught the attention of only 23.1% of respondents compared to 62.7% in September last year.
This heightened concern around the world economy unnerved respondents about the labour market. Almost all respondents who recalled news items about the jobs market noted that the news was unfavourable. There was a sharp 5.8% increase in the Westpac– Melbourne Institute Index of Unemployment Expectations (a higher print indicates heightened employment concerns). The Index is now at its highest read since December 2014.
Most of the components of the Westpac-Melbourne Institute Consumer Sentiment Index fell in September. Households responded negatively around their own finances. The sub-index tracking assessments of ‘family finances vs a year ago’ fell by 5.7%, while that tracking expectations for ‘family finances over the next 12 months’ fell by 1.1%. Nevertheless, both of these components is comfortably higher relative to September last year (7.6% and 8.7% respectively). The volatile sub-index tracking expectations for ‘economic conditions over the next 12 months’ fell by 11.2% (down 11.5% over the year) while the sub-index tracking expectations for ‘economic conditions over the next five years’ increased by 6.2%.
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However, the biggest move came from the sub-index tracking assessments of ‘time to buy a major household item’ which fell by 13.5% to be down by 13.3% over the year. While the fall in the ‘finances’ components would explain part of this fall the near 5% drop in the Australian dollar since the last survey may have discouraged purchasers who will now be expecting higher import prices.
Confidence around the housing market continues to erode. The ‘time to buy a dwelling’ index fell by 0.9% to be 8.6% down on a year ago and 30% lower than two years ago. The New South Wales Index continues to underperform with a 14% fall this month to be 34% down on a year ago and 55% over the last two years. Within that Index the Sydney component is down by 46% over the last year and has reached its lowest level since the survey began in 1975.
House price expectations are also waning. The Westpac House Price Expectations Index fell from 132.7 in August to 127.3 in September (down by 6.1%). This Index is now down by 17% over the last year although remains well above 100 indicating that more respondents still expect prices to continue to rise.
This month we also asked respondents about their choice of the wisest place for savings. Bank deposits remain the most popular choice at 27% (down from 29.4% in June). However this was lowest proportion registered since September 2009. 
This evidence of lower risk aversion is further highlighted by the lift in real estate as a favoured form of saving. The proportion of those respondents favouring real estate increased from 24.6% in June to 28.2% in September. This represents the highest proportion of respondents favouring real estate since September 2003 – the last time we had an investor-led boom in real estate.
The increase in the proportion favouring real estate is likely to be capturing the improving optimism of investors in the housing market whereas the deteriorating prints on the ‘time to buy a dwelling’ index is probably reflecting affordability concerns of upgraders and first home buyers. In that regard note that the Westpac – Melbourne Institute Index of House Price Expectations continues to point to rising prices, albeit at a slower pace.
The Reserve Bank Board next meets on October 6. We expect the Board will maintain its steady rates policy for the remainder of this year and throughout 2016.
The key to any decision to further cut rates, as expected by the financial markets, will be whether the Bank’s current forecast that the unemployment rate can stabilise around current levels proves sustainable. Despite soft economic growth, jobs growth has been strong over the past year partly because of the strong contribution to jobs from the improving export services sectors. A sustained deterioration in the jobs market will not be apparent until next year complicating the market’s expectations of a rate cut by year’s end.
 
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Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Solid fall in September Consumer Sentiment Index: Westpac's Bill Evans

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GUEST OBSERVER
As mining investment falls, Australia’s growth has needed to rebalance to other sectors of the economy. A key driver of this rebalancing act has been a pick-up in housing construction, motivated by low interest rates and rising housing prices. Dwelling approvals have been at record levels in recent months.
This has been a positive story, as Australia did not build many houses when the mining boom was at its height and had an accumulated housing undersupply. But for how long will it be a positive story? When will we have built enough houses, or potentially too many? These questions have become more pertinent recently, given both the ramp-up in housing construction and a slowdown in population growth.
Answering these questions is tricky. There are good measures of the number of new houses being built (supply), but estimates of housing oversupply or undersupply also rely on growth in the number of households (demand). This is affected by population growth and the number of people in each dwelling, which is poorly measured and a swing factor when there are housing shortages or affordability changes. For example, when housing prices rise, more people live together. In short, the numbers are quite ‘rubbery’.
However, despite the uncertainties, it is clear that the recent ramp-up in housing supply means the cumulative housing deficit is diminishing. Our estimates see the national housing market in balance by 2017. Across the states, Victoria has the highest risk of oversupply, while NSW and Queensland will have undersupplies for some time yet.
The bottom line is: Australia does not currently have an oversupply of housing, but a further jump in approvals could increase the risk of building too many houses. This could affect the house price outlook. It may also make the RBA more cautious about cutting rates further from here, as the costs of cutting further could start to outweigh the benefits.  
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Housing supply is ramping up, while population growth slows 
Housing supply has been ramping up in the past couple of years in Australia (Chart 1). Indeed, a pick-up in housing investment directly contributed 0.4ppts to GDP growth over the year to June 2015, which has been helping to rebalance growth as mining investment falls. 
Leading indicators of construction activity have recently risen to record levels with over 200,000 dwellings approved in the past year. The number of new dwellings approved in H1 2015 was 40% higher than in H1 2013. As building approvals typically lead dwelling completions by around 1-3 quarters, the current high level of approvals implies that some further ramp-up in construction is likely in coming quarters. We expect housing construction to continue to be a support for GDP growth in 2016. 
However, the ramp-up in housing investment has come at a time when population growth is slowing. The latest estimates show that population growth slowed to 1.4% in 2014, down from a recent peak of 1.7% in 2012 (Chart 2). The slowdown reflects slower growth in inward migration, with the largest driver of this trend being an increase in the net flow of Kiwis back to New Zealand. 
At first glance, these contrasting trends may seem worrisome. If housing supply is ramping up at the same time that demand is weakening, surely there could be excess supply in the market at some point? However, the story is more complex than this. Much of the recent ramp-up has been needed to work off an accumulated implicit undersupply of dwellings that occurred over the past decade. 
Australia has an accumulated housing undersupply 
Measuring the extent of undersupply in the housing market is, however, also quite tricky. This is partly because there is no literal housing shortage. Instead, the number of people per household adjusts to keep demand in line with supply. For example, when there is insufficient supply of housing at a reasonable price, young people may choose to live in their family home for longer. 
This pattern has been apparent in recent years with population growth exceeding the rate of growth in new households between the 2006 and 2011 censuses (Chart 3). Over that period, the average number of people per household levelled out, rather than falling in line with the historical trend. Importantly, small variations in the number of people per household can make a big difference to estimates of growth in the number of households (which drives housing demand). Measuring housing demand is further complicated by the fact that data on the number of people per household are only available on a five-year basis. 
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‘Underlying’ demand, therefore, has to be estimated, usually based on historical trends. To do this, we have used different scenarios for the number of people per household (Chart 4). In all cases, however, growth in the number of households has exceeded growth in the number of dwellings on average over the past 15 years (particularly between 2007 and 2010). So, on average, we have an accumulated implicit housing undersupply because in previous years we had built too few houses to meet new housing demand at a constant household size. 
When will the housing undersupply be worked off? 
Although there is significant uncertainty in these estimates, it is likely that we are now working off some of the undersupply that had previously built up. This is because dwelling construction is quite clearly growing faster than population growth. Our central estimates show that the housing undersupply probably peaked in 2012 at around 200,000 dwellings and has been falling since then (Chart 5). 
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Just how quickly we will work off the housing undersupply will depend on a number of factors, including how many dwellings are built from here, how much population growth slows and, of course, how many people there are per household. 
In Chart 5, we set out three scenarios based on varying rates of growth in the number of households and all assuming that dwelling construction continues at its current level, with completions running at around 220,000 dwellings (net of 15% for demolitions and un-occupied dwellings). In the central case, with household growth of 1.4% a year this sees the undersupply of housing worked off by 2017. 
Supply imbalances differ across the states 
Although there has been a lift in residential construction in most states recently, there have been stark differences in housing supply and demand dynamics over the past decade (Charts 6 and 7). 
Victoria and New South Wales (NSW) have experienced similar levels of population growth since around 2007; however, in Victoria, construction has kept pace with the increase in the population, while in NSW it has not (Charts 8 and 9). Since the beginning of 2007, the population of NSW has grown by an estimated 813,000 people. In Victoria, the increase was almost identical at 815,000 people. However, over that time, NSW has added 214,000 dwellings, while Victoria added 307,000.
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These disparities across the states mean the national story of a housing shortfall does not apply evenly. Our estimates show significant shortfalls seem likely in NSW and Queensland. In contrast, Victoria, South Australia and Western Australia appear to be much closer to balance. These trends in housing demand and supply are no doubt contributing to the strong growth in housing prices in Sydney and weaker housing price growth elsewhere (Chart 10). 
Looking forward, housing construction has been lifting in all states and recent building approvals suggest further growth to come. In Queensland and Western Australia, there has also been a sharp slowdown in population growth. These factors combined point to a rapid improvement in the level of the housing stock relative to demand. In NSW, a significant upswing in housing construction is underway, and population growth appears to be slowing modestly. However, the accumulated housing deficit appears to have been largest in NSW, so adjustment may take some time yet. In Victoria, as discussed above, housing construction appears to have kept pace with population over recent years. Slower population growth and even stronger construction poses the risk that certain parts of the market may become oversupplied. 
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<a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">P</a>aul Bloxham is chief economist (ANZ) for HSBC . Daniel Smith is economist. They can be contacted <a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">here</a>.
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